Obamacare Is Failing Because The Product Sucks

Conn Carroll

1/10/2014 2:00:00 PM - Conn Carroll

Throughout Obamacare's botched roll out, President Obama ofteninsisted that the program would recover because, as he said at an event in California, "The product is good. People want it."

But do they? Health insurance consultant Robert Laszewski isn't so sure. Here is what he told The Washington Post yesterday:

I do have a concern that people are looking at these plans and not finding value. Some people are looking at paying 10 percent of their income for plans with huge deductibles, and then you have politics of Obamacare and the bad press of the launch and if you put all those things in a bag and mix them up, I am really concerned that the uninsured who are healthy are not finding Obamacare the value they hoped it will be. That’s the real risk for Obamacare.

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If an entrepreneur had crafted Obamacare he would’ve gone to a middle class family. A family of four make $54,000 a year has to pay $400 in premiums net of subsidy and for that the standard silver plan has an average deductible around $2,500 and a narrow network. They’re going to pay almost $5,000 for that?

So the entrepreneur would say I’ve got $5,000 in premium and all this deductible, what do they want for that? And they probably would’ve said we want office visits and lab tests because the kids need to go in occasionally and then we want catastrophic care. The problem with Obamacare is it’s product driven and not market driven. They didn’t ask the customer what they wanted. And I think that’s the fundamental problem with Obamacare. It meets the needs of very poor people because you’re giving them health insurance for free. But it doesn’t really meet the needs of healthy people and middle-class people.

This is why Obamacare hasn't gotten any more popular after HealthCare.gov got fixed. Millions of middle-class Americans have gone online hoping to find a good deal on health care, and instead they have walked away disappointed.

The bottom line: the product Obamacare is selling, purposefully overpriced health insurance designed to indirectly subsidize the poor and sick, is just not a product many Americans want to buy.

That is why it so important for Republicans to keep attacking the individual mandate. Obamacare is a terrible product that many Americans do not want to buy. Forcing them to buy it is unpopular now and it will only become more unpopular as the IRS starts increasing the penalties for not buying it.

Once the individual mandate is repealed, the rest of the law will collapse faster. And by that time, a Republican White House nominee should have unified the party around a fuller health care alternative.